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The Filing Cabinet

"The Filing Cabinet," which covers compliance with the Dodd-Frank Act and the Sarbanes-Oxley Act, as well as other regulatory action from the Securities and Exchange Commission, executive compensation, and shareholder activism, is written by CW staff writer Joe Mont. Mont welcomes questions, comments, and statements from readers on SEC filing matters and will address them here when appropriate. Readers can contact him at joe.mont@complianceweek.com.

In an increasingly rare display of unity among members of the Securities and Exchange Commission, they say that the Commission needs to dust off decades-old rules for transfer agents. New requirements could include requiring agents to be appropriately insured, properly disclosing conflicts of interest; and being subjected to more robust disclosure. More inside.

The SEC has decided not to let an admission of LIBOR manipulation result in the loss of Deutsche Bank’s well-known seasoned issuer status. “It is safe to assume that these waiver requests will continue to roll in, as issuers are now emboldened by an unofficial Commission policy to overlook widespread and serious criminal conduct,” Commissioner Kara Stein said in her objection. Details inside.

The Securities and Exchange Commission is seeking to better define the requirements for security-based swap transactions that involve a foreign entity’s activity in the United States. A new proposed rule addresses what to do when only certain activities involving a security-based swap transaction occur within the United States. More inside.

SEC Chair Mary Jo White was in the hot seat Tuesday during during a hearing before the House Committee on Financial Services. Republicans scrutinized her $1.7 billion budget request, while Democrats blasted the Commission’s “bad actor” waiver process and a decision not to require political spending disclosures.

Amid a fierce debate among commissioners, the SEC’s Division of Corporation Finance has issued guidance on how and when waivers will be granted for companies that face disqualification from registration exemptions when raising capital. Determinations will include whether the misconduct was isolated, company leadership was involved, and training and remediation efforts are likely to be effective.

For more than a year, the SEC has been divided over the use of waivers that allow firms to engage in capital-raising activities despite an enforcement action. For the first time, SEC Chairman Mary Jo White has entered the fray. Waivers should not be wielded as an enforcement tool, she says, stressing that no firm is “too big to bar.” Details inside.

Speaking recently at the Practicing Law Foundation’s “SEC Speaks” forum, various SEC commissioners detailed their priorities for 2015. Hot topics included the Commission’s reliance on in-house administrative proceedings, a disclosure regime that hasn’t kept pace with technological advancements, and the challenge of creating a more diverse workforce at the Commission.

Companies seeking waivers that allow them to retain exemptive relief despite an enforcement action may soon get fresh guidance from the Securities and Exchange Commission on how that increasingly contentious process will work in the future. Speaking at a conference in Washington D.C., Elizabeth Murphy, an associate director for theDivision of Corporation Finance, offered an update on the waiver process and some advice for companies that will rely upon it.

Oct. 23—The SEC has adopted final rules for the asset-backed securities market that will require securitizers to retain no less than five percent of the credit risk of the assets they securitize. The rule was adopted one day after the Federal Deposit Insurance Corporation, Federal Housing Finance Agency, and Office of the Comptroller of the Currency adopted similar requirements. SEC Commissioner Michael Piwowar said the rulemaking, “manages to take the policies that lost the last war and adopt them as the government’s preparation to win the next.” More inside

In recent Congressional testimony, Securities and Exchange Commission Chair Mary Jo White was optimistic that a final version of the controversial pay-ratio rule could be completed by the end of the year. Nevertheless, Americans for Financial Reform, a prominent advocacy group and coalition of Wall Street watchdogs, is demanding action.

Aug. 27—Four years in the making, the Securities and Exchange Commission has adopted revised rules governing the disclosure, reporting, and offering process for asset-backed securities. In a separate but related action, it also finalized several new requirements for credit rating agencies registered with the SEC as nationally recognized statistical rating organizations. The new rules require issuers to provide standardized asset-level information for ABS backed by residential mortgages, commercial mortgages, auto loans, auto leases, and debt securities (including resecuritizations). Details inside.

Aug. 26—National securities exchanges and the Financial Industry Regulatory Authority plan to experiment with tick size alternatives, allow some stocks to trade in five-cent increments, and see whether that trading structure increases their liquidity and should be made permanent. The proposal, announced by the Securities and Exchange Commission on Tuesday, will create a 12-month pilot program for widening minimum quoting and trading increments for a sampling of companies with a market cap of $5 billion or less. More inside.

A report by the Securities and Exchange Commission’s Office of Inspector General has uncovered a variety of ways that non-public information from executive sessions may not be well-protected. This includes media leaks, failing to clear the meeting room of unrelated observers, not soundproofing the room, and sending confidential attachments to personal e-mail accounts. More inside.

Amid growing scrutiny of proxy advisory firms and concerns about their influence over corporate governance matters and the potential for conflicts of interest, the Securities and Exchange Commission has issued new guidance. It addresses conflicts, disclosure exemptions, and the use of these firms by investment managers voting on behalf of clients.